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v3.23.2

Business Segment Information | 6 Months Ended
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Jun. 30, 2023
Segment Reporting [Abstract] |
Business Segment Information | Note 12 Business Segment Information UScellular and TDS Telecom are billed for services they receive from TDS, consisting primarily of information processing, accounting, finance, and general management services. Such billings are based on expenses specifically identified to UScellular and TDS Telecom and on allocations of common expenses. Management believes the method used to allocate common expenses is reasonable and that all expenses and costs applicable to UScellular and TDS Telecom are reflected in the accompanying business segment information on a basis that is representative of what they would have been if UScellular and TDS Telecom operated on a stand-alone basis. Financial data for TDS’ reportable segments for the three and six month periods ended, or as of June 30, 2023 and 2022, is as follows. See Note 1 — Basis of Presentation for additional information.
Three Months Ended or as of June 30, 2023 | UScellular |  | TDS Telecom |  | Corporate, Eliminations and Other |  | Total
(Dollars in millions) |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |
Service | $ | 760 |  |  | $ | 257 |  |  | $ | 24 |  |  | $ | 1,041 |
Equipment and product sales | 197 |  |  | — |  |  | 29 |  |  | 226 |
Total operating revenues | 957 |  |  | 257 |  |  | 53 |  |  | 1,267 |
Cost of services (excluding Depreciation, amortization and accretion reported below) | 190 |  |  | 108 |  |  | 18 |  |  | 316 |
Cost of equipment and products | 228 |  |  | — |  |  | 24 |  |  | 252 |
Selling, general and administrative | 341 |  |  | 81 |  |  | 14 |  |  | 436 |
Depreciation, amortization and accretion | 161 |  |  | 60 |  |  | 4 |  |  | 225 |
(Gain) loss on asset disposals, net | 3 |  |  | 2 |  |  | — |  |  | 5 |
Operating income (loss) | 34 |  |  | 7 |  |  | (8) |  |  | 33 |
Equity in earnings of unconsolidated entities | 38 |  |  | — |  |  | — |  |  | 38 |
Interest and dividend income | 3 |  |  | 1 |  |  | 2 |  |  | 6 |
Interest expense | (51) |  |  | 2 |  |  | (13) |  |  | (62) |
Income (loss) before income taxes | 24 |  |  | 10 |  |  | (19) |  |  | 15 |
Income tax expense (benefit) | 19 |  |  | 3 |  |  | (7) |  |  | 15 |
Net income (loss) | 5 |  |  | 7 |  |  | (12) |  |  | — |
Add back: |  |  |  |  |  |  |
Depreciation, amortization and accretion | 161 |  |  | 60 |  |  | 4 |  |  | 225 |
(Gain) loss on asset disposals, net | 3 |  |  | 2 |  |  | — |  |  | 5 |
Interest expense | 51 |  |  | (2) |  |  | 13 |  |  | 62 |
Income tax expense (benefit) | 19 |  |  | 3 |  |  | (7) |  |  | 15 |
Adjusted EBITDA 1 | $ | 239 |  |  | $ | 70 |  |  | $ | (2) |  |  | $ | 307 |
Investments in unconsolidated entities | $ | 457 |  |  | $ | 4 |  |  | $ | 39 |  |  | $ | 500 |
Total assets | $ | 10,889 |  |  | $ | 3,219 |  |  | $ | 298 |  |  | $ | 14,406 |
Capital expenditures | $ | 143 |  |  | $ | 132 |  |  | $ | 3 |  |  | $ | 278 |
Three Months Ended or as of June 30, 2022 | UScellular |  | TDS Telecom |  | Corporate, Eliminations and Other |  | Total
(Dollars in millions) |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |
Service | $ | 783 |  |  | $ | 256 |  |  | $ | 25 |  |  | $ | 1,064 |
Equipment and product sales | 244 |  |  | — |  |  | 41 |  |  | 285 |
Total operating revenues | 1,027 |  |  | 256 |  |  | 66 |  |  | 1,349 |
Cost of services (excluding Depreciation, amortization and accretion reported below) | 192 |  |  | 103 |  |  | 17 |  |  | 312 |
Cost of equipment and products | 275 |  |  | — |  |  | 33 |  |  | 308 |
Selling, general and administrative | 339 |  |  | 77 |  |  | 11 |  |  | 427 |
Depreciation, amortization and accretion | 172 |  |  | 52 |  |  | 5 |  |  | 229 |
Loss on impairment of licenses | 3 |  |  | — |  |  | — |  |  | 3 |
(Gain) loss on asset disposals, net | 6 |  |  | 1 |  |  | — |  |  | 7 |
Operating income | 40 |  |  | 23 |  |  | — |  |  | 63 |
Equity in earnings of unconsolidated entities | 37 |  |  | — |  |  | 1 |  |  | 38 |
Interest and dividend income | 3 |  |  | — |  |  | 2 |  |  | 5 |
Interest expense | (40) |  |  | 2 |  |  | (2) |  |  | (40) |
Income before income taxes | 40 |  |  | 25 |  |  | 1 |  |  | 66 |
Income tax expense | 18 |  |  | 7 |  |  | 2 |  |  | 27 |
Net income (loss) | 22 |  |  | 19 |  |  | (2) |  |  | 39 |
Add back: |  |  |  |  |  |  |
Depreciation, amortization and accretion | 172 |  |  | 52 |  |  | 5 |  |  | 229 |
Loss on impairment of licenses | 3 |  |  | — |  |  | — |  |  | 3 |
(Gain) loss on asset disposals, net | 6 |  |  | 1 |  |  | — |  |  | 7 |
Interest expense | 40 |  |  | (2) |  |  | 2 |  |  | 40 |
Income tax expense | 18 |  |  | 7 |  |  | 2 |  |  | 27 |
Adjusted EBITDA 1 | $ | 261 |  |  | $ | 76 |  |  | $ | 8 |  |  | $ | 345 |
Investments in unconsolidated entities | $ | 441 |  |  | $ | 4 |  |  | $ | 38 |  |  | $ | 483 |
Total assets | $ | 11,003 |  |  | $ | 2,803 |  |  | $ | 436 |  |  | $ | 14,242 |
Capital expenditures | $ | 268 |  |  | $ | 120 |  |  | $ | 3 |  |  | $ | 391 |
Six Months Ended or as of June 30, 2023 | UScellular |  | TDS Telecom |  | Corporate, Eliminations and Other |  | Total
(Dollars in millions) |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |
Service | $ | 1,527 |  |  | $ | 510 |  |  | $ | 47 |  |  | $ | 2,084 |
Equipment and product sales | 415 |  |  | — |  |  | 71 |  |  | 486 |
Total operating revenues | 1,942 |  |  | 510 |  |  | 118 |  |  | 2,570 |
Cost of services (excluding Depreciation, amortization and accretion reported below) | 372 |  |  | 212 |  |  | 38 |  |  | 622 |
Cost of equipment and products | 480 |  |  | — |  |  | 58 |  |  | 538 |
Selling, general and administrative | 686 |  |  | 162 |  |  | 28 |  |  | 876 |
Depreciation, amortization and accretion | 330 |  |  | 119 |  |  | 7 |  |  | 456 |
(Gain) loss on asset disposals, net | 13 |  |  | 3 |  |  | — |  |  | 16 |
Operating income (loss) | 61 |  |  | 15 |  |  | (14) |  |  | 62 |
Equity in earnings of unconsolidated entities | 82 |  |  | — |  |  | — |  |  | 82 |
Interest and dividend income | 5 |  |  | 2 |  |  | 4 |  |  | 11 |
Interest expense | (99) |  |  | 4 |  |  | (21) |  |  | (116) |
Other, net | — |  |  | 1 |  |  | — |  |  | 1 |
Income (loss) before income taxes | 49 |  |  | 21 |  |  | (30) |  |  | 40 |
Income tax expense (benefit) | 29 |  |  | 5 |  |  | (6) |  |  | 28 |
Net income (loss) | 20 |  |  | 15 |  |  | (23) |  |  | 12 |
Add back: |  |  |  |  |  |  |
Depreciation, amortization and accretion | 330 |  |  | 119 |  |  | 7 |  |  | 456 |
(Gain) loss on asset disposals, net | 13 |  |  | 3 |  |  | — |  |  | 16 |
Interest expense | 99 |  |  | (4) |  |  | 21 |  |  | 116 |
Income tax expense (benefit) | 29 |  |  | 5 |  |  | (6) |  |  | 28 |
Adjusted EBITDA 1 | $ | 491 |  |  | $ | 139 |  |  | $ | (2) |  |  | $ | 628 |
Capital expenditures | $ | 351 |  |  | $ | 262 |  |  | $ | 8 |  |  | $ | 621 |
Six Months Ended or as of June 30, 2022 | UScellular |  | TDS Telecom |  | Corporate, Eliminations and Other |  | Total
(Dollars in millions) |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |
Service | $ | 1,570 |  |  | $ | 507 |  |  | $ | 48 |  |  | $ | 2,125 |
Equipment and product sales | 467 |  |  | 1 |  |  | 71 |  |  | 539 |
Total operating revenues | 2,037 |  |  | 507 |  |  | 120 |  |  | 2,664 |
Cost of services (excluding Depreciation, amortization and accretion reported below) | 377 |  |  | 199 |  |  | 35 |  |  | 611 |
Cost of equipment and products | 533 |  |  | — |  |  | 57 |  |  | 590 |
Selling, general and administrative | 663 |  |  | 150 |  |  | 24 |  |  | 837 |
Depreciation, amortization and accretion | 342 |  |  | 106 |  |  | 8 |  |  | 456 |
Loss on impairment of licenses | 3 |  |  | — |  |  | — |  |  | 3 |
(Gain) loss on asset disposals, net | 8 |  |  | 1 |  |  | — |  |  | 9 |
Operating income (loss) | 111 |  |  | 51 |  |  | (4) |  |  | 158 |
Equity in earnings of unconsolidated entities | 82 |  |  | — |  |  | 1 |  |  | 83 |
Interest and dividend income | 4 |  |  | — |  |  | 3 |  |  | 7 |
Interest expense | (73) |  |  | 4 |  |  | (3) |  |  | (72) |
Income (loss) before income taxes | 124 |  |  | 56 |  |  | (4) |  |  | 176 |
Income tax expense (benefit) | 50 |  |  | 14 |  |  | 1 |  |  | 65 |
Net income (loss) | 74 |  |  | 41 |  |  | (4) |  |  | 111 |
Add back: |  |  |  |  |  |  |
Depreciation, amortization and accretion | 342 |  |  | 106 |  |  | 8 |  |  | 456 |
Loss on impairment of licenses | 3 |  |  | — |  |  | — |  |  | 3 |
(Gain) loss on asset disposals, net | 8 |  |  | 1 |  |  | — |  |  | 9 |
Interest expense | 73 |  |  | (4) |  |  | 3 |  |  | 72 |
Income tax expense (benefit) | 50 |  |  | 14 |  |  | 1 |  |  | 65 |
Adjusted EBITDA 1 | $ | 550 |  |  | $ | 159 |  |  | $ | 7 |  |  | $ | 716 |
Capital expenditures | $ | 405 |  |  | $ | 225 |  |  | $ | 3 |  |  | $ | 633 |
Numbers may not foot due to rounding. 1 Adjusted earnings before interest, taxes, depreciation, amortization and accretion (Adjusted EBITDA) is a segment measure reported to the chief operating decision maker for purposes of assessing the segments' performance. Adjusted EBITDA is defined as net income, adjusted for the items set forth in the reconciliation above. TDS believes Adjusted EBITDA is a useful measure of TDS’ operating results before significant recurring non-cash charges, gains and losses, and other items as presented above as they provide additional relevant and useful information to investors and other users of TDS' financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management's evaluation of business performance.

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